Wall Street Close: Big-tech drives rally on Wall Street

Wall Street's benchmark stock indices rallied strongly on Monday.

The S&P 500 was about 1% below its record closing high from Sept. 2, nearly recovering from most of a 9% pullback last month.

The moves were fueled by expectations of a coronavirus relief package. It looks like the administration wants a deal done before the election which has lead to a rally in Amazon, Apple and other technology stocks ahead quarterly earnings season.

Optimistic sentiment dominated after the Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill as negotiations on a broader package ran into resistance.

Apple Inc AAPL jumped 6.4%, adding $128 billion to its stock market value, ahead of an event on Tuesday, when it is expected to unveil its newest iPhones.

Amazon AMZN rallied 4.8% ahead of its annual Prime Day shopping event on October 13 and 14.

Microsoft MSFT jumped 2.6%, helping lift the S&P 500 information technology index 2.7%.

The Dow Jones Industrial Average climbed 0.88% to end at 28,837.52 points, while the S&P 500 added 1.64% to 3,534.22. The Nasdaq Composite put on 2.56% to 11,876.26.

However, fiscally conservative Republicans failed to back the latest White House proposal (USD1.8trn) given constituents’ concerns about the rapidly ballooning budget deficit, analysts at ANZ Bank explained.

''CBO projects that the budget deficit for 2020 will amount to USD3.3trn, or 16% of GDP – the largest since 1945 as federal outlays hit 32% of GDP. The deficit, without any additional stimulus, is projected at 8.6% of GDP for 2021.

Some Republicans are also concerned that agreeing a large stimulus at this late stage would hand the Democrats a fiscal victory on the eve of the Presidential and Congressional elections.

We remain sceptical that a deal will be agreed soon, and that leaves the US recovery vulnerable to downside risks in coming months.''

S&P 500 levels